Marketing Management
CLA 1
Competitive Analysis
Marketing Management Part 2
Competitive Analysis
Competitive analysis is a technique for identifying competitors and evaluating their strategies to determine the strength and weakness of our brand. In this report, competitive analysis of the iPhone, a product of Apple Company, is presented compared to Samsung.
Samsung-As the Competitor
The Consumer electronics category is expanding day by day. The current leaders of this category are Samsung and Apple that hovers about 11% of the share in the market. Earlier, the market was ruled by Motorola and Nokia, but with the launch of the iPhone in 2007, the market was taken over by Apple . With its large multi-touch user interface, the product rapidly became popular among users. In 2013, the galaxy series was introduced by Samsung that gave high competition to Apple. With the massive advertisement and unique features, Samsung galaxy became the most popular brand in the world.
Objectives
iPhone
· Create groundbreaking products.
· Dictate and innovate technology movement.
· Global expansion
· Digitalization and technological innovation.
· Increase market share and profitability
· Brand recognition and development
Samsung
· Inspire customers via innovative products
· Lead innovation in technology
· Lead the mobile industry
· Inspire communities with products
· Gain profitability and market share.
Strategies
Samsung and Apple use different competitive strategies to dominate the market.
Apple uses the blue Ocean strategy. Apple created new demand in the market by utilizing the blue ocean strategy. Apple dominated the market with its flagship iPhones that blended art and technology . On the contrary, the Red Ocean strategy is used by Samsung. Samsung gained a competitive advantage by venturing into the market with a flood of smartphones developed at low prices within a short time. Apple takes a lot of time in launching a new iPhone as it relies on external suppliers. Samsung took advantage of this weakness and developed components for its Smartphone.
Strengths
Weaknesses
Competitive Analysis
Industry
The mobile phone industry is dominated by Apple and Samsung, accounting for 11% of the market share. iPhone accounted for 29% of the smartphone’s sale and Samsung to 37% of the smartphone sales by 2019. Apple's revenue in the year 2020 was $137.7 billion, with iPhone accounting for 50% of all the sales. Samsung sold 255.7 million units in the year 2020 and generated revenue of KRW 61.5 trillion. Galaxy S series accounts for 50% of all the sales.
Market
Samsung accounted for 21% of the market share, and Apple accounted for 49% of the market share in the US by the year 2020. Samsung has divided its market into segments, including demographic, geographical, psychological, and behavioral characteristics. Samsung penetrates deeply into regions, especially Asia. Most of the Samsung users are adults belonging to both genders. Samsung does not define its products to any class in society. Based on consumer personality and lifestyle segments are created. It depends upon the benefits that consumer’s desire from smartphones.
Apple is mainly rooted in international markets, especially the US targeting the urban population. The age group between 20-45 years of age use iPhones having high purchasing power. In the behavior category, Apple is for loyal customers who will only buy Apple products. Apple customers usually have a high living style and make up the upper class in society.
Porter Five Forces Model
Degree of Competition
iPhone faces strong competition in the market. Samsung, Huawei, Google, Nokia, OnePlus, and several other brands have emerged in the market. One of the factors is low switching cost that makes this industry highly competitive. This threat is dealt with by developing unique products and investing in R&D.
Bargaining Power of Buyers
Two powers here are; collective and individual bargaining powers. Individual power is weak as the loss of a single customer will not hamper Apple's revenue. However, the collective power of customers in the marketplace is a strong force as it may lead to mass defections. Brand loyalty to iPhone is built with its unique features and innovative designs.
Threats of New Entrants
This threat is relatively low as massive capital is required to invest in R&D, brand recognition, and the manufacture of a unique product portfolio to threaten the iPhone's market share. Hence the competition exists between large firms that are already established.
Suppliers Bargaining Power
This power for Apple products is weak due to the presence of several potential suppliers and ample supply. The switching cost is relatively low for Apple to exchange its suppliers. Moreover, for many suppliers, Apple is the major buyer; therefore, they are reluctant to lose the business.
Threat To Substitution
In Porter's model, substitutes are not competing for products rather products that can take the place of any product. In the case of the iPhone, the substitute could be a landline phone. Hence, the substitute power is relatively low for iPhone as a landline telephone does not provide as much access as an iPhone.
Competitive Analysis Matrix
Marketing Strategy
Marketing Mix 7 Ps
Product
Even though Apple offers premium products at premium prices, it still maintains high-profit margins and market share. However, technology is ever-changing; therefore, iPhones with innovative features should be manufactured.
Place
Apple has stores all over the globe, and more than 200 million iPhones are sold each year. Therefore, to make iPhones accessible to all, more stores should be set up in major areas of countries to increase sales.
Price
Despite its premium price, iPhone is among the best-selling smartphones around the globe. Apple should continue manufacturing iPhones with cutting-edge technology to match the premium price.
Promotions
Apple has developed its brand recognition without any advertisements or marketing campaigns. For iPhone users, the curiosity lies in the fact that every next version of the iPhone will have added features that persuade them to buy. Apple must set up events and conferences for announcing the release of the new iPhone.
People
Apple hired more than 75000 people since its creation. The technological giant ensures that they have the best staff that are highly trained and provide the best results to customers.
Process
Firstly, product designing occurs in isolation from all other departments. The executive team, Engineering team, and supply chain teams work together to make decisions regarding the manufacture of the best products. The product is packed in special packaging and launched through professionals detailing its features.
Physical Evidence
iPhones are sold online and in physical stores that are simple and sophisticated with attractive and updated physical evidence for proving customers with an exceptional experience.
References
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Cain, G. (2021). Samsung vs Apple: Inside The Brutal War For Smartphone Dominance. Forbes. Retrieved 29 May 2021, from https://www.forbes.com/sites/forbesdigitalcovers/2020/03/13/samsung-vs-apple-inside-the-brutal-war-for-smartphone-dominance/?sh=6e2e134e4142 .
Ferguson E, (2019). Apple Inc. Five Forces Analysis (Porter’s Model) - Panmore Institute. Panmore Institute. (2021). Retrieved 29 May 2021, from http://panmore.com/apple-inc-five-forces-analysis-porters-model-case-study .
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Tien Hoang, N. (2019). International Distribution Policy Comparative Analysis Between Samsung And Apple. International Journal of Research in Marketing Management and Sales 2019; 1(2): 24-27. https://www.marketingjournal.net/article/view/13/1-1-11